Smoldering Middle East risks, an unclear monetary policy path, and critically questioned AI valuations could keep Wall Street trapped in a seesaw market. Investors are likely to continue acting with a tight rein overall, driven by interest rate concerns and high expectations in the AI sector.
Without a fixed point of reference, investors are lacking a clear direction amidst the tension between geopolitical risks and interest rate expectations, as well as high AI speculation. It should be noted that Wall Street will be closed on Friday due to the holiday (Independence Day advanced to June 4th, 2026).
Despite framework agreement: Iran conflict escalates again – AI euphoria on the test bench
Investors will likely continue to follow developments in the Iran conflict closely in the coming days. Despite a signed framework agreement between the US and Iran, the conflict has escalated again with mutual attacks. However, peace talks are expected to continue, it was stated.
Also likely to be kept in view is the recent waning AI euphoria on Wall Street. Whether this is merely profit-taking or a reassessment remains to be seen. The recent correction in the technology sector should serve as a cautionary note against this backdrop.
„JOLTs and ADP data could provide an early glimpse of NFPs
Potential catalysts await investors on Tuesday during the shortened trading week, with the so-called JOLTS (Job Openings and Labor Turnover Survey) at around 4:00 PM. These figures, along with the ADP employment data on Wednesday at 2:15 PM, could provide important clues for the preliminary US labor market data (Non-Farm Payrolls) on Thursday.
Also, mid-week, there's a speech by the new Fed Chairman Kevin Warsh from 3:00 PM, which should be examined for monetary policy clues.
The ISM Manufacturing PMI should be watched at 4:00 PM.
US job data in focus already on Thursday – economists expect hiring slowdown compared to the previous month
Logically, the official US jobs data are on the agenda on Thursday starting at 2:30 PM, which should serve as the highlight from an economic calendar perspective. Economists expect a job gain of 110,000 non-farm payroll positions for the month of June, after 172,000 new jobs were created in the previous month. The unemployment rate is estimated to be 4.3 percent, unchanged compared to May.
The new US labor market data could become particularly interesting from a monetary policy perspective. A stronger-than-expected jobs report could fuel existing concerns about interest rate hikes. According to CME Group's „Fed Watch Tool,“ 70.6 percent of market participants currently expect a pause in interest rates at the next scheduled Fed meeting on July 29, and 29.4 percent expect an interest rate hike.
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